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EU rejects latest WTO farm trade reform plan

(Thursday, March 20, 2003 -- CropChoice news) --Two stories here on the WTO and agriculture.

2. EU rejects latest WTO farm trade reform plan (Thursday, March 20, 2003 -- CropChoice news) -- By Aine Gallagher: BRUSSELS, March 19 (Reuters) - The European Union rejected a revised proposal to cut international farm trade barriers on Wednesday, adding to criticism already heard from Japan.

Trade nations are counting down to a March 31 deadline to agree ways to negotiate liberalising the $550 billion world trade in agriculture products as part of global commerce talks due to end by 2005.

"We do not see this draft as bringing the WTO members closer. Harbinson 2 is largely identical to the first draft. Severe imbalances remain," European Trade Commissioner Pascal Lamy and Farm Commissioner Franz Fischler said in a statement.

The EU criticised the original draft by WTO chief agriculture mediator Stuart Harbinson when it was issued last month.

It said the paper was unbalanced in its call for export subsidies to be eliminated and import tariffs slashed -- as it went much further than proposals by the EU itself.

In the new paper, there was little mention of two key EU demands -- to put limits on money spent on export credits and food aid, two strategies the EU says are used by the United States to dump surplus output on world markets.

Harbinson made few concessions in his revised version of the reform plan, blaming WTO member states for failing to come up with sufficient compromise suggestions.

France's Farm Minister Herve Gaymard, backed by Foreign Trade Minister Francois Loos, issued a similarly worded joint statement on the latest farm paper from the WTO.

"The new proposal...very little altered compared with the previous one, does not constitute an acceptable basis to engage in negotiations," the statement said.


Japan's farm ministry said earlier: "The contents (of the new draft) are especially advantageous to certain exporting countries, so we cannot accept it in its entirety."

The arguments continue despite comments last week by key WTO official Carlos Perez del Castillo that the end-March farm talks deadline was virtually certain to be missed.

The first Harbinson blueprint ran into heavy criticism for either going too far in freeing up trade or not going far enough. The revised draft calls for export subsidies to be eliminated in two phases over five and nine years.

Harbinson's plan for cuts in import tariffs would see the sharpest reductions where duties are highest, something demanded by large exporting countries -- but he did not include their call for ceilings to be set.

Harbinson presented his second draft ahead of talks due to start next Tuesday in Geneva.

EU officials have said missing the end-March deadline was not the end of the world.

Diplomats have said failure to stick to the timetable would be a heavy blow and might jeopardise the proposed September date for trade ministers to meet in the Mexican resort town of Cancun.

2. WTO Ag Chief - not enough common ground

By NAOMI KOPPEL, Associated Press Writer: GENEVA - The man leading negotiations on reducing barriers to international trade in agriculture said Tuesday he cannot produce a new proposal on how to go forward because the differences between countries are too great.

In a note to the 145 members of the World Trade Organization (news - web sites), Stuart Harbinson said that he had received "insufficient collective guidance" and that "positions in key areas remained far apart."

The WTO has given itself until the end of this month to agree on the document, which is supposed to form the blueprint for the agriculture agreement, which is seen by many as the key to a wider round of trade liberalization negotiations.

Harbinson's first proposal last month tried to find common ground between members but was roundly criticized by almost all countries. While some nations mostly large, agricultural exporting countries like Australia, the United States and Brazil said Harbinson's proposal did not go far enough, importers like the European Union (news - web sites) and Japan said it was too ambitious.

Harbinson, who chairs the WTO committee negotiating on agriculture, had agreed to produce a second proposal in time for seven days of talks starting March 25. But he acknowledged the document he published Tuesday made only minor changes in a limited number of areas and more talks between countries was needed.

"Readiness on all sides to engage in serious negotiations aimed at finding solutions that can attract broad-based support will be of the essence," he said.

Harbinson's proposal calls for import tariffs on agricultural goods to be cut by up to 60 percent a figure considered much too high by countries like Japan that use tariffs to protect sensitive products like rice, and by some developing countries who say they need the income from the duties and have to use the system or risk ruining their domestic producers.

It also proposes the elimination of all subsidies linked to exports within nine years and drastic cuts to other subsidies. The European Union, which devotes nearly half its entire budget to supporting farmers, says the cuts are too large. It says the payments are needed to ensure self-sufficiency, protect the rural environment and ensure animal welfare standards demanded by European consumers.

But the 18-nation agricultural exporting Cairns Group and the United States say the subsidies and high import duties make it impossible for their farmers to compete internationally, even if they are more efficient producers.

Last week, the chairman of the WTO General Council, Carlos Perez del Castillo of Uruguay, was the first senior WTO diplomat to acknowledge that it is unlikely that differences can be bridged before the March 31 deadline.

If agriculture discussions overrun, that could slow the progress in the WTO's other areas of negotiation, such as trade in manufactured goods and trade in services like banking and telecommunications.